New help for expat Americans in Asia as U.S. tax noose tightens


If you are American then you will probably have had the dubious pleasure to having to deal with the Internal Revenue Service (IRS). This is the U.S. government agency responsible for tax collection and tax law enforcement and, like the FBI, “always gets its man” or woman should they decide to take the tax dodger’s route.

America has finally discovered that it is broke and needs all the money it can get, therefore, it is after American expats as some of them have been an untapped source of income for many years.

The plethora of paperwork you now need to fill in simple tax returns is frightening and it is almost possible to blame America for the reduction in the size of the Amazonian Rainforest by the fact that the IRS insists on having these forms printed and completed by Joe Public.

It is now vital that Americans speak to someone who actually knows what they are talking about. You need to find a company which has updated its new suite of advisory and transactional services to ensure compliant tax reporting and legitimate minimization of tax liabilities for American companies and expats in Asia.

The increase of FBAR (Foreign Bank Account Report) requirements of overseas assets by the ‘shadow FBAR’ (S.8938) provisions came into effect this year. The new Foreign Account Tax Compliance Act (FATCA) will turn the screw even further on U.S. expats by obliging financial institutions to report foreign assets and income of individuals and corporations from 2013 onwards.

To counter the legislation, you need to find a company which can help U.S. institutions, corporations and individuals minimize exposure, yet remain fully compliant with U.S. laws and reporting obligations. Preferably, you need a company in the same time-zone and is capable of further expanding its U.S. advisory team and capabilities, as and when the need arises, because the American IRS is going to keep on coming after you.

“Uncle Sam, in the guise of the IRS, is after high net worth American individuals overseas,” says Paul Gambles, Chief Investment Officer at MBMG Asset Management. “It’s all because the Treasury is desperately trying to balance its budget.”

The administration is following the thinking of Warren Buffett who has advocated a minimum tax rate of 30% for individuals earning more than a million dollars a year.

The U.S. Treasury hopes these and other tax proposals such as a 20% capital gains tax, a 55% gift tax and a general reduction of personal tax exemption, will raise an additional US$36.7 billion a year to offset a rising budget deficit.

To avoid coming into conflict with U.S. tax authorities, international banks such as UBS, Credit Suisse, Deutsche Bank, HSBC and HypoVereinsbank will no longer accept private accounts of U.S. nationals.

“Tax rates seem certain to increase and non-compliant assets, gains or income will become ever harder to hide,” says Gambles. “But tax-planning opportunities continue to exist and are now more important than ever. Using compliant offshore and onshore vehicles and structures, MBMG can help overseas Americans minimize the pain.”

Gambles believes that many banks, advisors and managers are treating U.S. nationals “like pariahs” because of fear of FATCA. “But if you do everything right then there should be nothing to fear. So, MBMG’s doors are very much open to all American individuals, corporations and institutions.”

For practical steps, there are a number of legitimate solutions that exist to minimize exposure for American individuals and companies. These include deferred variable annuities, private placement universal variable life insurance, direct investment into offshore funds, and IRA LLCs, all of which any decent company with full knowledge of American laws can advise upon.

“Every crisis has its opportunities,” says Gambles. “There are an enhanced range of financial solutions which are totally legal and can save Americans a small fortune. These will minimize immediate and ongoing tax exposure and also develop efficient and robust longer term solutions.”

Says Gambles: “We want to help our current and future American clients sleep easily at night by reminding them that they have access to the best advice.”

So, do not be like the shepherd in ‘Big Jake’ and wait for John Wayne to cut you loose from the noose but get in touch with someone that actually knows how to stop you getting hanged in the first place.

The above data and research was compiled from sources believed to be reliable. However, neither MBMG International Ltd nor its officers can accept any liability for any errors or omissions in the above article nor bear any responsibility for any losses achieved as a result of any actions taken or not taken as a consequence of reading the above article. For more information please contact Graham Macdonald on [email protected]